TOBACCO at present is grown over nearly two per cent of the total area under cultivation, making Pakistan the fifth largest tobacco producing country. The share of this crop in GDP is about four per cent.

The Federal Board of Revenue last year collected Rs66 billion as sales tax and central excise duty from tobacco industry. The industry, directly or indirectly, provides jobs to some 100,000 people, whereas 70,000 families earn their livelihood through cultivation of the crop.

The use of tobacco is being discouraged in many developed countries. The US has restricted cultivation of tobacco; the UK levied 200 per cent taxes on its consumption during the current budget. Other developed states are trying to reduce cultivation of this crop systematically and there has been over 8.7 per cent reduction in consumption of tobacco in Germany in the first quarter of 2008.

But in around 20 countries, during the first half of 2008, over seven per cent increase in tobacco production has been recorded. Whatever the causes for rise in production and consumption of tobacco in the developing countries, critics and even advocates of tobacco believe that these countries, promoting tobacco growth, should re-evaluate their policies, keeping in view the risks to human health from tobacco use.

The growers’ representative bodies allege that total yield of tobacco is always under-stated so that levies on raw (green) tobacco imposed by the government could easily be evaded. This impacts payment of development cess, central excise duty, sales tax paid by tobacco industry.

Official records do not show accurate production figures. Market sources estimate the total consumption of cigarettes at 78 billion while only 60 billion sticks are on record, which results in evasion of Rs7.4 billion under the head of sales tax.

This undocumented yield, production, sale, purchase, import and export reach the climax when only two tobacco companies paid Rs65.566 billion out of total Rs66 billion deposited in the government exchequer on the sale of cigarettes during 2006-07 while rest of 68 tobacco industries paid only Rs367.6 million during the same period. Also, a large number of such tobacco units exist which have not paid any tax to the government exchequer since a decade.

Total area under cultivation of tobacco and yield per hectare is always concealed by government departments that collect taxes, levies and cess development fund. For example, the Pakistan Tobacco Board claims that total area under tobacco cultivation is not more than 27,000 hectares with a production of 60,000 tons of tobacco. But wide ranging surveys conducted by international bodies say that the area under tobacco cultivation is 57,000 hectares while the yield is above 1,20,000 tons.

While these contradictory figures regarding tobacco crop need to be reconciled for better revenue collection, the public representatives should explore innovative alternatives of tobacco crop. It may noted that Pakistan has signed UN’s Conventions in 2005 to reduce tobacco production.